I’m not sure I agree with the title (although catchy) used on YouTube for this video. After all, what is money anyway? Most modern currencies are fiat currencies – their value only comes from our collective belief or agreement that it has value. The Euro, Dollar et al are not backed by anything – not gold, not silver, not water nor anything… Really they are just bits of paper and coin to a lesser extent and largely just ones and zeros on computers. Their legitimacy largely comes from government’s accepting payment of taxes in the currency in question. The two basic requirements for “money” are:

it is a store of value

it is a medium of exchange

Argentina’s Global Exchange Network’s credits satisfy the second requirement certainly and most probably the first also. So I think that “Argentina: Surviving by creating their own Money” or the like would be more accurate – even if it does look like “fake” Monopoly (the game, that is) money 😉

Since I last looked for software that can manage a Local Exchange Trading System or community currency, the range of offerings seems to have improved greatly. Of particular interest to me, being an avid fan of Drupal, is the following module for Drupal:

Living Economy

An all-embracing and flexible package which includes a mutual credit engine, transaction forms and displays, including several views and blocks. It can be used as a digital back end for paper money projects, or to run an entire LETS or Timebank. With a little tweaking, it can manage currencies conforming to a wide range of designs.

If you’ve looked at Cyclos and CES, then this module will do most of the work of either of those.

Maldivian 50 Rufiyaa : The Local market which is buzzing with movement all day long

What price globalisation? Globalisation has been presented to us a model based on economies of scale that will deliver mass customisation of products and services that we want or need. In my experience, what it has delivered is a more homogeneous culture with less choice and diversity. Increasingly cities around the world are converging with high streets featuring the same old multinational chain stores. Small, family owned businesses have gradually been disappearing over the recent past.

But products and services are much “cheaper” now than in the past, many may say. So it appears but of course there are many hidden costs or “externalities” to use the economic term. Aside from the moral need for fair trade and the cessation of exploitation of workers in the form of cheap labour in so-called “lesser developed countries”, surely it is ridiculous to import food that could be grown locally from half way around the world as has been the case.

With or without cheap oil, the hidden costs of such practices have a huge impact on the environment. Large scale agriculture has obvious negative impacts such as deforestation, soil erosion and so on. Artificial fertilisers are required to nourish plants grown in this manner. Monoculture or the growing of crops on such large scales requires the use of artificial pesticides which damage the environment and our health. Whether or not excessive food miles or the importing of food food from distant countries has a direct impact on the climate is another debate but certainly it does leave us in a vulnerable position.

“This Ship is Sinking” is a chapbook created and independently published by Los Angeles graffiti artist EWSO.

Many “developed” countries are unable to provide their populations with food for longer than a few weeks if an economic shock disrupts the international flow of goods and services. Indeed, the collapse of the world’s marine commerce, doesn’t bode well.

When budgets are tight, the natural tendency is to economise and shop wherever goods are cheapest. If the cheapest option is to buy our necessities from the multinational chain stores, there other hidden costs in the form of pushing down the local wage rate for local workers and small businesses. Money spent on cheap foreign goods simply leaches money from the local community again leaving us vulnerable to economic shocks. And what happens if the chain store goes out of business? We may no longer have the local skills and resources to fill the vacuum.

One of the main drivers in modern economic thought for globalisation is “customs union theory” on which the European Union is formed. This theory essentially states that if one country is better at producing one good, let’s say potatoes and another country is better at producing wheat, that each country should specialise in producing the good at which it excels and trade with the other country. In this way both countries should have more of each good or potatoes and wheat, in our example. But if there is an economic shock of some sort and trade is reduced, both countries are in a vulnerable position.

A more sensible approach is that each country should be self sufficient in the basic necessity goods making them less vulnerable to economic shocks. Of course, more of something is not always necessarily better. In the case of food, obesity levels in “developed” countries are an indicator that this may be the case. Being self sufficient in necessities is not to say that trade cannot exist between countries for less essential or luxury goods. But at least survival is no longer survival is no longer such an issue in the event of an economic downturn.

In recent years, largely motivated by peak oil theory, there have been movements to re-localise our economies and practice more sustainable methods of agriculture such as permaculture. There is some debate and controversy surrounding peak oil theory but now faced with the harsh economic conditions we endure, these movements have other motivating factors for their adoption, namely the credit crunch.

If you still need more convincing, check out the films below. And your comments are very welcome…

WAL-MART: THE HIGH COST OF LOW PRICE is a feature length documentary that uncovers a retail giant’s assault on families and American values.

The film dives into the deeply personal stories and everyday lives of families and communities struggling to fight a goliath. A working mother is forced to turn to public assistance to provide healthcare for her two small children. A Missouri family loses its business after Wal-Mart is given over $2 million to open its doors down the road. A mayor struggles to equip his first responders after Wal-Mart pulls out and relocates just outside the city limits. A community in California unites, takes on the giant, and wins!

Running time: 98 Minutes

Future of Food – There is a revolution happening in the farm fields and on the dinner tables of America, a revolution that is transforming the very nature of the food we eat. This documentary explores the disturbing truth behind the unlabeled, patented, genetically engineered foods that have quietly filled grocery store shelves for the past decade. It also examines the complex web of market and political forces that are changing what we eat as huge multi-national corporations seek to control the world’s food system.

“Paul Grignon’s 47-minute animated presentation of “Money as Debt” tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. The Cowichan Citizens Coalition and its “Duncan Initiative” received high praise from those who previewed it. I recommend it as a painless but hard-hitting educational tool and encourage the widest distribution and use by all groups concerned with the present unsustainable monetary system in Canada and the United States.”

This film is a gem. It explains clearly and simply how the current financial system has evolved and its shortcomings. The banking system and particularly “fractional reserve” banking necessitates that some people will not be able to pay their debts as there is not enough money in the system to for everyone to pay back the interest they owe on their loans. It’s like a game of musical chairs and everything seems great until the music stops playing. As soon as the music stops, (as soon as lending stops for whatever reason) some people playing the game will not be able to find a chair (pay their debts).

Furthermore, the film highlights that this financial system is just one system and that there are others. Complimentary or local currency systems like LETS (Local Exchange Trading System) are able to provide liquidity or the ability for people to trade with each other when other systems fail.

We are so involved in the current financial system that it’s hard to see any way out of the credit crunch that it has created as a foregone conclusion. Understanding how the financial system works is the first step in learning how the system can be improved, complimented with other more sustainable systems or maybe even abandoned.